News & Events

2.21.2014

Lane Powell Shareholder Darin Sandswas interviewed on Voice America Talk Radio Network’s show titled “Fear is Negotiable: Business Survival Skills 101” on February 11. In the interview, Sands discussed cybersecurity and data-breach lawsuits, the highly publicized data breach at Target, and data breaches related to HIPAA and health care. A data breach can cause an organization to be subjected to numerous lawsuits and considerable damages to its reputation. A recent study revealed that 52 percent of all data breaches occur in the health care industry, which is substantially larger than any other business sector. Sands explained that consumer medical records are targeted since they can be sold on the black market for use in identity theft. Many businesses and health care providers are now instituting security requirements and becoming more vigilant in tracking the threats in ways they weren’t five years ago. Several companies are now taking a proactive approach to data security by investing in cyberinsurance to ensure their security measures are up to par. However, it’s important for businesses to also work with legal counsel to fully understand their policies and the protection they provide.

The cost of a data breach, depending on what industry it is, can range anywhere between a million dollars and 20 million dollars, so businesses are aware of that and are trying to insure themselves. What I advise my clients or people who just ask me generally about this is to make sure that you work with legal counsel who are sophisticated about these policies. What we’re finding is that a lot of people are buying cyberinsurance policies without really knowing how these policies play out in the event of a breach and what types of breaches trigger the coverage. It’s really important to be careful and sophisticated when you purchase this. It’s certainly something that I would advise all companies who have vulnerability and store customer, health or financial information investigate, but it’s also a procedure that oftentimes requires making sure your security policies are up to par, and the insurance companies will require that.